Domino’s iPhone success shows apps are moving from novelty to sales generator

Businesses are now moving away from developing iPhone apps as marketing tools, and are instead pumping thousands of dollars into producing revenue-generating software, Domino’s chief executive Don Miej says.

The comments come as the company announced its official app has recorded 300,000 downloads during the past six months, producing millions in revenue for the company.

Meij says the app has delivered revenue seven times beyond the company’s expectations, and continues to record downloads every day.

“Technology is becoming a bigger part of our business. The app is powerful in that users can do it in their own time and it is convenient for them. It delivers a benefit for them as opposed to using the phone or ordering in store, because they are more relaxed while ordering.”

While Meij would not specify how much the app cost the company, experts have said a comprehensive application could cost up to $50,000.

Domino’s also said earlier this year the app had generated $2 million in revenue during the first 12 weeks of operation. With downloads occurring at roughly the same pace, the company has almost certainly recorded sales of more than $4 million thanks to the app.

Meij says Domino’s was focused specifically on how the app would deliver a financial benefit, instead of just simply using the software as a marketing tool.

While some companies have used smartphone apps just so they can get market themselves instead of gaining money, Meij says this is a waste of time and businesses should only spend money developing apps that will give them a significant financial benefit.

“The app is first and foremost a tool used for business. We did a business case study when we developed this app, and we had to justify internally what we were doing with our money. It has to deliver a benefit for us.”

“I know some businesses are using their apps as marketing tools, but that’s really a secondary benefit for us. This app is sophisticated, it was hard to make, and because of that we want to see a benefit from it.”

Meij says the one mistake a lot of companies make with iPhone apps is that they are too “entertaining”, and aren’t focused on usability. Instead, he says, users are more likely to keep apps on their phone that deliver them significant value instead of a gimmick, like a short game.

“The big mistake companies make is they try to make apps too entertaining, and forget the relevance to the consumer. They will only keep apps that are convenient, so Facebook, YouTube and so on. The app has to fit alongside that, so it won’t just be deleted after a day of use.”

Meij says sales are also expected to rise due to the release of Domino’s iPad app. He says this will make ordering more convenient, and is banking on early demand in the US as a key indicator.

“People are posing the question, why do I want an iPad, but my experience is that everyone in the US wants one and it’ll be the same here.”

“I think we’re going to see a massive take-up of tablets, and apps on tablets, and over the next two years these technologies are going to replace older, clunkier versions. Customers don’t tolerate poor technology, so we have to offer something to use on the new tech people are using.”